Category Archives: Liquor.Stores

The Pennsylvania Liquor Control Board has posted this year’s earnings, and they’re higher than ever. Despite overhead cost increases, the PLCB said the revenues are a sign the industry is healthy. But House Republicans — who have long wanted to privatize liquor sales — said it just amounts to price gouging. As lawmakers search under couch cushions for money to balance a stalled state budget, the PLCB’s been chipping in more and more cash. A record-setting $216 million last fiscal year was more than double the previous year’s contribution. It’s slated to pay a little less this year, but the number is still high. …

House Republicans on Tuesday pushed ahead a set of changes to how alcohol is sold in the state, moving to privatize wholesale wine and spirits sales and expand the retail outlets where booze is available. Lawmakers voted 105-84 in favor of the wholesale divestment proposal, sending it with other proposals to the Senate for its consideration. The House voted to allow more grocery stores to seek permits to sell wine, no longer restricting the permits to stores with seating capacity, and retailers would be able to buy wine from brokers in the private sector. …

State House Republicans are attempting to chart a new course for liquor sales in Pennsylvania, pushing a traditionally state-run system further and further toward privatization. The as-yet-unknown revenue from that change is also expected to play a key role in balancing the caucus’s proposed budget. As of Monday, four different GOP-led proposals are awaiting votes on the House floor. The House Liquor Control Committee just passed House Bills 975 and 1075. The former would stop Pennsylvania from wine wholesaling, and the latter–which is even broader–would take the commonwealth out of both wine and liquor sales entirely. …

Half of all Utahns favor the state government getting out of the liquor retail business, a new UtahPolicy poll finds. Don’t expect that to happen any time soon, however. Liquor law changes in Utah historically must get the blessing of leaders of the Mormon Church, and alcohol control has been a hallmark of the church’s liquor policy for years in its home state. In a new UPD poll, Dan Jones & Associates finds that 49 percent of Utahns favor privatizing liquor sales in the state. … You can see from this Utah Taxpayers Association “Fast Tax” pamphlet that in fiscal year 2014-2015 (the latest numbers) that state government took in $8.2 million in the beer tax and $95.4 million in profit from its state liquor stores. Ten percent of liquor sales, or $41 million, automatically goes into public education, by law. The Department of Alcohol Beverage Control has been under fire for several years for poor management, underpaying its store sales staff and other issues. That has led some lawmakers to argue the state should just get out of the alcohol business, and let private entities sell liquor under state licensing and oversight – with the state taxing the sales in some manner. …

Utah’s state-run liquor outlets would better serve customers if they were operated more like convenience stores, according to the state auditor, though he stopped short of calling for privatization. A state audit of the Department of Alcoholic Beverage Control released Tuesday shows its management lacks the flexibility, data and tools to reach the “level of operational success we expect,” Auditor John Dougall said. … The audit found:
• Stores could be better staffed to handle customers, especially at peak hours.
• Ordering and stocking products could be improved.
• Wages are lower than other liquor-control states but comparable to convenience stores.
• DABC has inadequate tracking and evaluating of store costs.

Researchers disagreed Thursday on whether states, like Utah, that control alcohol distribution do better at curbing drunken driving, underage drinking and overconsumption, but they agreed on one sure-fire way to reduce such social ills: boost the price of booze.
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The Sask. Party government privatization plans for 40 liquor stores include 36 in rural communities. They generated $32.63M in revenue in 2014. This is a profit that will now go to the private sector and which we, the taxpayers, will have to make up. What the Wall government does not want made clear are the financial and human costs to our rural communities. We are told that about 150 employees earning about $6M in total wages, are losing their government jobs. How many will be exercising their seniority and move away from small towns already reeling from the loss of grain elevators, banks, post offices, school and hospital closures? … While most of these communities will, no doubt, lose at least some families, the smaller ones will also end up with abandoned store buildings. There are no guarantees the privateers will use the existing government buildings. Abandoned buildings mean lost property taxes for communities already facing shrinking tax bases. …

Studies of privatization in Alberta have shown privatization has led to higher prices as small businesses are being bought out by large corporations that charge more. Further, there has been a decrease in consumer choice (specialty products that don’t sell in high volumes don’t get shelf space), and an increase in social and policing costs — sales first, safety later. David Campanella and Greg Flanagan’s 2012 study: The economic and social consequences of liquor privatization in Western Canada, takes a closer look at these comparators for British Columbia, Alberta and Saskatchewan. In a price survey of common types and brands of liquor in these jurisdictions, they found B.C.’s private stores consistently averaged the highest price out of all, with private stores in Alberta “close behind.” Publicly owned stores in B.C. had the lowest prices for the items measured, followed by the Saskatchewan Liquor and Gaming Authority. A 2014 Global News study found beer in Alberta’s private stores was significantly more expensive than it was in Manitoba. And a 2014 Beer Store report, Convenience Store Alcohol Would Drive Prices Up, Government Revenue Down, found deregulated alcohol sales in Ontario “would drive up prices, harm communities and lead to hundreds of millions of dollars in lost tax revenue.” What did it say about selection? “There would be no benefit to offset the risks of deregulation. Not on price, or selection.” Ontario’s Beer Stores stock up to 330 brands, while the selection in Alberta is less than half that number.

The issue of alcohol sales in corner stores and gas stations is once again in the news in Ontario. Proponents of deregulated alcohol sales claim that deregulation will lower consumer prices, increase product choice, generate higher government revenues while at the same time improving responsible sales practices. While such claims may sound enticing, a review of the deregulation experiences of other North American jurisdictions shows that this combination of outcomes has never been realized anywhere in practice. In fact, increased availability of alcohol in jurisdictions that have deregulated liquor retailing has been accompanied by significant increases in consumer prices, a general reduction in product selection and lower government alcohol tax revenues. The following paper compares the performance of Ontario’s existing beverage alcohol retail system across a variety of factors to liquor retailing systems that have undergone varying degrees of retail deregulation with a particular focus on Alberta and British Columbia given the robustness of available data on those markets. Factors examined include expected impacts on consumer prices, government revenues, product selection, availability of liquor and responsible sales practices.

In Alberta and British Columbia, liquor retail privatization has meant higher liquor prices but lower government revenue. Moreover, the increased availability of alcohol brought on by privatization and its lax regulation contravene recognized methods for protecting public health. In light of Premier Brad Wall’s recent decision to move Saskatchewan towards a hybrid private/public model along the lines of British Columbia, these social and economic consequences of liquor privatization must be front and centre in any debate over the future of public liquor delivery in Saskatchewan.

A grocers coalition says it plans to withdraw an initiative to privatize liquor sales in Oregon so the group can focus resources on defeating a corporate sales tax proposed for the November ballot. Oregonians for Competition, led by the Northwest Grocery Association and Distilled Spirits Council, suspended Wednesday, April 27, collection of signatures in support of Initiative Petition 71. The measure would end state sale and distribution of distilled spirits and allow grocery stores to sell the products alongside beer and wine. … The Distilled Spirits Council does not plan to participate in the campaign against the corporate sales tax measure but will look for a way to move forward its effort to allow the sale of distilled spirits in grocery stores, said Eric Reller of the Distilled Spirits Council. McCormick said the grocers coalition also would continue to advocate for allowing sale of distilled spirits in grocery stores in the next 12 months.

The state Supreme Court on Thursday approved the title language of a November ballot proposal that would allow grocery stores to stock their shelves with distilled liquor across Oregon, where there are currently more places to buy legal recreational marijuana than a bottle of Jack Daniels. Grocers behind the measure now have the go-ahead to begin gathering 88,100-plus required signatures by July, the final step to put Initiative 71, dubbed Oregonians for Competition, before voters this fall. … Oregonians Against the Takeover – a coalition formed by the Associated Liquor Stores of Oregon, Oregon Beer & Wine Distributors Association and East Bend Liquor, among a handful of others – argues liquor costs would soar as they have in Washington state, which privatized in 2011 and now boasts among the highest prices in the country.

Yet today, the American Federation of State, County and Municipal Employees contributed $10,000 to Beverage PAC, a private-sector political action committee funded by beer and wine distributors. Why? The distributors oppose a 2016 ballot measure that would privatize the Oregon Liquor Control Commission and dismantle the tightly controlled alcoholic beverage business, threatening the lucrative niche distributors occupy. As for AFSCME, it represents the workers employed at the OLCC’s mammoth Milwaukie warehouse, where virtually every bottle of booze consumed in the state is shipped before being sent to retail locations. The union’s money will help underwrite polling on the OLCC.

Talking while he worked, Hale said the proposed ballot initiative filed Oct. 28 by a coalition of grocers seeking to privatize liquor sales in Oregon is a worrisome development. Cascade Alchemy, a 3-year-old startup, ships its six varieties of bottled spirits to about 100 liquor stores in Oregon. The stores, all run by contractors under a state-controlled system, afford small distillers a level, transparent playing field in a marketplace dominated by big labels, Hale and other distillers said. The grocers’ initiative would end the role played by the Oregon Liquor Control Commission as a warehouser, distributor and market regulator, but it would cripple small distillers and set back even those with several years experience, local distillers said. … Along with state involvement in selling liquor, it would end the revenue stream the OLCC collects from those sales. The six-page initiative says nothing about replacing that revenue, other than that sales of state properties and savings on future spending should go toward “enhancing public safety and preventing the sale of distilled liquor to minors.” …Continue reading →

Washington voters had one giddy night like that in November 2011. We were getting restless in our relationship with state-run liquor stores when Costco and other retailers swooped in with their sweet talk. They wooed us with promises of cheaper prices and greater convenience, and we were seduced. Initiative 1183 won 58 percent of the vote. Then the next morning came, and a lot of us got that queasy feeling that we’d fallen for an initiative that wasn’t that good-looking after all. It quickly became clear that alcohol wouldn’t be any cheaper under the initiative, and four years later, we’re still paying the price – the highest price for booze in America, that is. You might have thought the free market would bring down costs, but you know what’s immune to that? Taxes. The independent Tax Foundation says Washington’s rate of $35.22 a gallon is $12.50 higher than second-ranked Oregon. It’s triple the tax rate of the noted alcohol-friendly state of Utah and 10 times higher than people pay in California.

The privatization of retail liquor sales in Washington state has delivered a sustained boost to the state liquor divisions in neighboring Idaho and Oregon. Private retailers took over liquor sales in Washington in 2012 following passage of a ballot measure, notably backed by Costco. An analysis by the Alcohol Research Group at the Public Health Institute in Emeryville, California, published last year found that liquor prices rose by an average of 15.5 percent after privatization, but vary greatly by store type. The price increases were largely due to added state taxes. … An interactive online map of Oregon retail liquor outlets shows a sharp jump in sales coinciding with Washington’s privatization. At ten stores near the Oregon-Washington state line the increases from 2011 to 2013 ranged between 17 to 67 percent, with most at doing at least 30 percent more business. Those boosts in sales were sustained through fiscal year 2015, the most recent year of data available.

Abstract:
Industry privatizations that result in exogenous job displacement of public employees can be exploited to estimate public sector wage rents. I report the findings of an original survey I administered to examine how wages of displaced government workers were affected by a 2012 privatization of liquor retailing in Washington State. Based on a panel difference-in-differences estimator I find that privatization reduced wages by $2.51 per hour or 17 percent compared to a counterfactual group of nearly identical non-displaced workers, with larger effects for women. I decompose wage losses into three rents identified in the literature: public sector rents, union premiums, and industry-specific human capital. Public sector wage premiums separately account for 85 to 90 percent of overall wage losses, while union premiums and industry-specific human capital account for just 10 to 15 percent. The results are consistent with a roughly 16 percent public sector wage premium.Continue reading →

However, two council members on the ad hoc committee, George Leventhal and Marc Elrich, scaled back talks about full privatization, pointing out that the DLC’s estimated $30 million in annual profits is spent on other county priorities. The loss of that revenue would be noticeable, especially because the county is facing the possibility of a property tax hike in order to raise enough funds to pass the fiscal year 2017 budget. … The department also employs more than 300 union employees who work in the retail stores and wholesale operations. UFCW (United Food and Commercial Workers) Local 1994 MCGEO President Gino Renne has said the employees will lose their jobs and benefits if the department is privatized.

For the first time since Prohibition ended in the U.S. more than 80 years ago, Maryland’s Montgomery County – which owns all the liquor stores within its borders — is taking steps to privatize the sale of alcohol. The county Council is formally asking the Maryland General Assembly to allow bars and restaurants to “special order” beer and wine from private stores. They now must buy it from county-owned stores or through the Department of Liquor Control….Montgomery County is one of the few local governments in the U.S. with complete control over its liquor stores. Many bars and restaurants have long complained the county does not offer a broad enough selection of wine and beer to fit customer demand. …

The Montgomery County Council Tuesday approved a resolution that could lead to partial-privatization of the county’s Department of Liquor Control (DLC), especially when it comes to the distribution of specialty craft beer and fine wines. … “For nine years I have asked myself why our County is the only county in the country to have a monopoly in the liquor business,” Berliner said in a prepared statement. “The answer, it seems, is simple: revenue and county employee jobs. I don’t find that answer satisfying… Council member Marc Elrich, a member of the committee, again said the DLC can make common-sense changes to improve its delivery services that will allow the county to continue collecting close to $30 million annually that goes into the county’s general fund. But Berliner said the revenue and county jobs don’t justify keeping the department open….

For several years, state Sen. Arthur Orr, R-Decatur, has said Alabama shouldn’t be in the business of selling alcohol. This year, he has legislation that would phase out the state’s ownership of 176 Alabama Alcoholic Beverage Control Board stores and allow private owners to bid to take them over. Based on Senate Bill 115, modified from previous versions, Orr, chairman of the Senate general fund committee, estimates $15 million a year can be saved if the state doesn’t run the stores…..It costs ABC about $45 million a year to run the stores. Most of that cost is in rent — it’s not allowed to own property — and the about 600 employees. Starting wage at an ABC store is about $21,000 a year, plus state benefits…. The ABC stores put a 30-percent mark-up on each bottle of liquor, 5 percent of which goes to the state General Fund. Twenty-five percent goes toward ABC expenses. In addition, a 56-percent state tax is charged. Alcohol sales support state agencies, including mental health and human resources. For fiscal 2013, ABC reported after it paid its operating expenses, it distributed $202 million to the state and local municipalities….
Related:Alabama lawmaker wants to get the state out of the retail liquor business
Source: Elizabeth BeShears, Yellowhammer, March 16, 2015

…Opponents say the bill, as it’s written, would increase prices for consumers and drive Alabamians to buy more liquor in neighboring states, where it is significantly cheaper. A very similar bill was introduced in the 2014 legislative session, but was never even heard by a committee. This year, the presence of two co-sponsors and the concern of the shortfall in the general fund’s budget suggests the bill may have a better chance of making it to the Senate floor….

From the abstract:
This paper examines failed attempts by three separate Republican Pennsylvanian governors to privatize the Pennsylvania Liquor Control Board (PLCB). Despite their efforts, the PLCB has never been fully privatized and is still in complete control of alcohol sales in the state. This is due primarily to a failure by proponents to define the issue, institutional roadblocks in the Pennsylvania General Assembly, and major missteps in political communication by the separate administrations.

…Eighteen states have an agency charged with overseeing the wholesale or retail sale of liquor or wine, but only Pennsylvania and Utah exert complete control over all such sales. Now Pennsylvania is one of several states grappling with whether to modernize its system or get out of the alcohol business entirely. …Last November, voters in Washington State approved a ballot measure that will make Washington the first state since the 1930s to abandon its role in retail and wholesale liquor sales…Washington auctioned off its state-run liquor stores earlier this month, and it will complete the transition to a private system by June 1.